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Confidence Rise May Boost The West Michigan Economy (& Vice Versa!)

Confidence Rise May Boost The West Michigan Economy (& Vice Versa!)

The West Michigan economy, like all others, is largely dependent upon consumers doing what
consumers are supposed to do: buy! Why they make their decision to behave or
not is every bit as complicated as you would suppose. It’s the product of how
their own careers are faring; how the greater economy (and the economy in West Michigan)
are doing; even how the world economy is behaving — or seems likely to behave
anytime soon.

In all of this, the hard facts about how the economy is
actually doing are not just backward-looking, they’re also slow to arrive. Worse yet to those who think numbers should mean something definite, the
numbers are frequently recalculated later. The latest ‘jobs’ numbers or the
‘housing starts’ numbers, when they are announced, are often accompanied by a
statement that the previous quarters number has been “revised to” x. If you are a local business person who
makes projections based on the best information available, that wouldn’t be the
new number — it would be the previous, now revised number: very old information.

There is one way around this, though, and that’s
fortunate. Everybody has the same reliability and timeliness problems, yet have
to have some basis for making discretionary spending decisions. The usual
solution is to rely upon measurements not of the actual economy’s activity now
or in the past, but of what most people expect
that activity to be in the future.

Yes, that kind of measurement is ‘soft’ — opinion, rather
than hard data. But if those expectations are widely publicized, they affect
what actually comes to pass. If consumers are bullish on the future, well, that’s
reassuring news! West Michigan businesses are
encouraged to stock their shelves. People are more likely to list their West Michigan homes for sale. The local economy
looks better and better! On the other hand, if consumers are depressed about
the future, caution will prevail. Businesses will hold off on new hires and
trim their inventories. You can’t be too careful, after all. To some degree,
consumer expectations often become self-fulfilling prophesies.

That’s why December’s latest consumer confidence reports
are the best news for the future of the economy we’ve heard for some time. Last
week, Reuters ran the headline, “U.S. Consumer Sentiment at Eight-Year High”;
the Business Insider, “Consumer Confidence Crushes Expectations.” Reuters
attributed the burst of citizen optimism to “improved prospects for jobs and
wages, and on lower gasoline prices…”

The University of Michigan co-sponsors the index upon
which the numbers are based, which showed December’s reading of consumer
sentiment at 93.8, “the highest reading since January 2007.” That was a full 4
points above the median that had been previously forecast by 70 economists. It
was also 5 points higher than the final reading for November.

If the West Michigan economy
perks up as anticipated, area real estate watchers should expect a noticeable
uptick in activity — particularly if mortgage interest rates stay low, and
inflation remains a non-factor (the same survey pegged consumer inflation
expectations at 2.9%). If you are a West Michigan homeowner
or prospective buyer with an equally upbeat outlook, it’s good reason to give
me a call to discuss how your plans dovetail with a rebounding market!

The data relating to real estate on this web site comes in part from the Internet Data Exchange Program of the Northern Michigan MLS (NM-MLSX). Real estate listings held by brokerage firms other than Coldwell Banker Schmidt REALTORS are marked with the NM-MLSX logo and the detailed information about said listing includes the listing office.

All information deemed reliable but not guaranteed and should be independently verified. All properties are subject to prior sale, change or withdrawal. Neither the listing broker(s) nor Coldwell Banker Schmidt REALTORS shall be responsible for any typographical errors, is information, misprints, and shall be held totally harmless.

The data relating to real estate on this web site comes in part from the Internet Data Exchange Program of the Water Wonderland MLS, Inc. (WWLX). Real estate listings held by brokerage firms other than Coldwell Banker Schmidt REALTORS are marked with the WWLX logo and the detailed information about said listing includes the listing office.All information deemed reliable but not guaranteed and should be independently verified. All properties are subject to prior sale, change or withdrawal. Neither the listing broker(s) nor Coldwell Banker Schmidt REALTORS shall be responsible for any typographical errors, is information, misprints, and shall be held totally harmless.

The data relating to real estate on this web site comes in part from the Internet Data Exchange Program (IDX) of the Paul Bunyan Board of REALTORS®. The listings displayed are from MLS Participants of the Wexford/Missaukee MLS Database, as so designated, who have chosen to participate in Paul Bunyan Board of REALTORS® IDX Service, through its subsidiary corporation, Paul Bunyan MLS, Inc. The detailed information about said listings includes the listing office information.The information being provided is for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. All information is deemed reliable but not guaranteed and should be independently verified. All properties are subject to prior sale, change or withdrawal. Neither the listing broker(s) nor Paul Bunyan Board of REALTORS® or its MLS Service, Paul Bunyan MLS, Inc., represented through display of data taken from either of its MLS databases, Wexford/Missaukee or Ros Co, shall be responsible for any typographical errors, misinformation, misprints, and shall be held totally harmless.Paul Bunyan Board of REALTORS®, Paul Bunyan MLS, Inc. All rights reserved.

All information deemed reliable but not guaranteed. All properties are subject to prior sale, change or withdrawal.
Neither broker(s), agent(s) nor WhereToLive.com, Inc. shall be responsible for any typographical errors,
misinformation or misprints, and shall be held totally harmless.